New Orleans Offering Incentives to Win Back Carriers

Jaime Guillet On Mar 7, 2007
Source: New Orleans CityBusiness

Louis Armstrong New Orleans International Airport officials hope regional carrier ExpressJet Airlines will be the first of many new flights landing at the facility post-Hurricane Katrina. Armstrong officials have experienced a turbulent 18 months of rebuilding available air service and scheduling enough flights for incoming conventioneers. But interim Aviation Director Sean Hunter expects air service rejuvenated to pre-Katrina levels by early 2008. "I'm looking beyond Katrina. It's no longer my goal," Hunter said.

"I'm courting all the carriers. I'm not being picky. When we talk with (the airlines), we dig our heels in and say 'Let's look at your schedule and look at lowering your operating cost. You can do your maintenance here instead of somewhere else.'

"We can create that here to bring in the service."

Hunter plans to advertise in a major publication such as The Wall Street Journal or USA Today to invite carriers to bring their service to New Orleans by extending incentives such as no landing fees for new services and cheaper per-seat costs approved Nov. 15 by the New Orleans Aviation Board.

The open-ended New Orleans airport leases with airlines, which require no specific time lengths, make Armstrong an attractive site to add flights, Hunter said.

"ExpressJet is a big beneficiary of the opportunities," Hunter said.

Houston-based ExpressJet will offer two daily 50-seat flights beginning April 30 to six destinations: Austin, Texas; San Antonio; Kansas City, Mo.; Birmingham, Ala.; Jacksonville, Fla.; and Raleigh-Durham, N.C. That will bring the airport to 75 percent of its pre-Katrina flights for a total 121 daily departures to 38 cities, or 90 percent of its pre-Katrina destinations.

Negotiations between ExpressJet and Hunter succeeded in part because of the incentives. But ultimately, ExpressJet simply wanted to fly here, he said.

"We hope we can provide the service for your major corporations to non-congested hubs," said Karen Miles, vice president of human resources and administration. "Our flights are scheduled for convenient times (so) business travelers can go up and come back all in one shot."

ExpressJet will generate 2,500 new professional jobs earning an average $45,000 a year, said Jefferson Parish President Aaron Broussard.

"As a result it easily could be a boost for our housing market and spur a lot of economic development in Jefferson Parish."

ExpressJet's network planners must have identified New Orleans as worth the added service, said John Heimlich, chief economist for the Air Transport Association, a Washington-D.C. trade group.

"They've clearly concluded with their business model ... the financials are there and it's attractive," Heimlich said.

Carrier officials from Continental, Delta, American, Southwest and United visited Armstrong and New Orleans since January to see the state of the city, said Maggie Woodruff, airport deputy director of community and governmental affairs.

"Airline schedulers don't usually go on site like sales people but seeing is believing," Woodruff said. "They are actively looking at our numbers and we're feeding it to them."

Airline hubs such as Houston-based Continental and Dallas-based American have close ties to New Orleans, which contributes flexibility to supplying flights, Hunter said.

Continental stepped up service during conventions, holidays and events such as Mardi Gras, Woodruff said.

The Transportation Security Administration reports 92,000 passengers departed from Armstrong between Feb. 16 and Feb. 22, up from 67,000 over the same period in 2006 but down from 149,000 pre-Katrina.

Despite encouraging numbers, Hunter is aware Armstrong is competing with cities such as Miami and Denver for increased service. Also, New Orleans' primary post-K flyer is a business traveler who tends not to book flights far in advance, which airlines don't view as sustainable demand, Woodruff said.

Heimlich said airlines typically look at the demand characteristics of a metropolitan area such as whether there's room to grow for leisure and business travelers.

Hunter's six-month vision includes the business traveler, he said. "Road Home checks (will be) in hand and people will be able to spend money. Contractors will line up and we'll have that artificial citizen," Hunter said.

"Inside a year the competition is going to be fierce. We're going to have some growing pains."